Take Back Your Credit

A recent government study found that some 10 million credit reports likely contain errors serious enough to impact people’s scores. And you know what that means. A lower score—even a little lower, say from some silly mix-up with your accounts—reduces your earning power. You pay more for all types of credit: loans, mortgages, credit cards. You could even lose out on a job or a place to live.

Even if you’re pretty sure you have great credit, it’s worth getting your free annual report to check—as a slight improvement can put you in a more credit-worthy category. (Under the Fair Credit Reporting Act, you can get a free credit report from each of the three main credit rating agencies once a year through www.annualcreditreport.com.)

The trouble is if you get your report and find an error. They’re not so easy to fix, says Ohio Attorney General Mike DeWine, who was interviewed for a “60 Minutes” special on credit earlier this month.

“The problem is not that [the credit bureaus] make mistakes, it’s that they won’t fix the mistakes,” DeWine said during the broadcast.

So what’s a solution-oriented, credit-smart gal supposed to do?

Lawmakers and advocates are using the new study to push for credit reforms. Meanwhile, keep a close eye on your credit, and keep reading for tips from Ed Mierzwinski of the U.S. Public Interest Research Group (PIRG), a consumer advocacy organization.

Contact the credit reporting company and explain, in writing, what you believe to be inaccurate. They are required by law to send you a detailed explanation, usually within 30 days.

Don’t believe “credit repair doctors.” There’s nothing they can do that you can’t.

The credit bureaus often outsource their customer service, so be sure to keep detailed records of all communications.

If you’ve filed a complaint that the credit bureau has refused to resolve, you’ll probably need a lawyer to fight on your behalf. Try the National Association of Consumer Advocates, and search for a lawyer with expertise in credit reporting.

Be proactive. Examine your report in advance to correct any errors before applying for credit. Mierzwinski recommends doing this 6-months prior, leaving ample time to right your wrongs.